In starting out as a publisher, it normally takes quite a while to establish a catalogue. First, you have to find an author worth publishing (or write the books yourself), and even once a book is commissioned, the process of writing, rewriting, editing and production can take some time. However, small publishers should be aware that there is another way of building your catalogue, and making some profit in the process - through books which have passed into the public domain.
Many very interesting books are now out of their copyright period and have therefore passed into the public domain. If you have access to a target audience interested in a certain topic, it is definitely worthwhile browsing through the public domain books related to that topic, as there may be a hidden gem just waiting to see the light of the day (again). For example, if you ran a popular internet forum devoted to esoteric and occult subjects, there are many key texts from the past few centuries which are in the public domain. Certainly, a large number of readers might appreciate a beautifully designed version of one of the classics.
Care must be exercised though. Publishers should make sure they understand the relevant copyright laws which apply in their situation. For instance, the time-frames in which copyright applies are different even between the U.S., Australia and Europe. As an example, Khalil Gibran's classic The Prophet remains under copyright protection in the U.S. (it was first published in 1923, the year that copyright protection currently begins), but in Australia it is now public domain). It is important also to pay attention to the details of the law - such as when the copyright begins. A book may have been written at an early time, but not published until later, and is therefore still under copyright. Also, translations are generally covered from that time, not from the original publication date. There really is no substitute for checking the official status of the copyright of a work, to protect against a potentially costly mistake, but check this page for some rules of thumb.
Enterprising authors and publishers might even step outside the box a little, and look at new ways of using this public domain material. Using parts of many works for a compendium, or just creating something new by riffing on the out of copyright work are fresh ideas that just may pay dividends. Public domain works present an interesting resource which all publishers should contemplate using.